Jumia Technologies, a pan-African e-commerce startup, saw its stock soar on Monday after it announced a partnership with United Parcel Service (UPS). The company given its track record has been informally called the “Amazon of Africa.”
At 11:07 a.m. on the New York Stock Exchange on Monday April 4, Jumia’s American depositary receipts jumped as much as 30%, the biggest gain since Aug. 3, 2020.
Both companies have expressed this on Twitter, with UPS showing a distinct pride in their African partnership with Jumia, an agreement intended to allow them “better support small business owners in Africa.”
According to Renzo Bravo, head of strategy for the Indian subcontinent, Middle East, and Africa, the agreement will allow Atlanta-based UPS to expand its footprint in a number of African regions and capitalize on an expected increase in online retail.
“We believe that Africa has the potential to reach around $180 billion in online trade by 2025,” Bravo said. “That will enable growth and commerce, not only across Africa, but also from the continent to the world and from the world to Africa.”
This is clearly great news for Jumia, whose stock was down 1% prior to the announcement. The business sells product, runs a marketplace for itself and others, advertises, and even accepts payments.
According to Apoorva Kumar, senior vice president of logistics at Jumia, the arrangement will allow the Berlin-based company to leverage UPS’s network to help users deliver their shipments across 220 countries and territories.
According to him, the relationship will begin in Nigeria, Morocco, and Kenya, with the goal of expanding to more nations. Jumia grew from $934.6 million to $1.2 billion as a result of the surge.
Companies appear to be more than prepared to pay Jumia to help them handle the intricacies of African shipping operations, and today’s news is significant since it has acquired UPS, one of the world’s largest shipping corporations. As a result of these recent customer victories, Jumia’s order volume is expected to skyrocket in 2022.
In 2012, French entrepreneurs Sacha Poignonnec and Jeremy Hodara established Jumia, which now has over 8 million customers.
The group has attempted to dominate in e-commerce on a continent that is becoming increasingly linked, despite constraints such as mapping difficulties, which may be found in large cities such as Lagos. According to them, UPS and Jumia are still talking about ideas including a rollout of co-branded pick-up stations.
“With Jumia’s logistics business, we have managed to build up a fleet and delivery network on the continent that holds some value for an international courier giant like UPS,” Kumar said.
Source: NASDAQ | Bloomberg